👀 Ones to watch: The MOST undervalued stocks to buy right nowSee Undervalued Stocks

Neogenomics maintains Buy rating and $21 price target from BTIG

EditorLina Guerrero
Published 06/11/2024, 20:18
NEO
-

On Wednesday, BTIG has maintained its positive stance on Neogenomics (NASDAQ: NEO), reiterating a Buy rating and a price target of $21.00. The firm's analyst highlighted Neogenomics' strong performance in the third quarter, with the company's core clinical services business growing by 14% year-over-year. This growth was attributed to a 9% increase in volume and a 5% rise in price.

Neogenomics has confirmed its revenue growth forecast for 2024, anticipating an 11-13% year-over-year increase. Additionally, the company has raised its 2024 Adjusted EBITDA guidance. A significant contributor to Neogenomics' growth is its Next (LON:NXT) Generation Sequencing (NGS) services, which now account for 31% of the clinical revenue.

The company is preparing to introduce its NEO Pan Tracer liquid biopsy blood test panel in the first half of 2025, which is expected to further contribute to its growth. Moreover, Neogenomics' RaDaR 2.0 is on track to receive CLIA validation within the same timeframe, although revenues from this minimal residual disease (MRD) testing are not anticipated to be included in the 2025 guidance expected to be issued around February.

BTIG's analyst expressed confidence in Neogenomics' potential for profitable growth in the upcoming years, supporting the firm's decision to reiterate the Buy rating and $21 price target.

In other recent news, NeoGenomics (NASDAQ:NEO), a prominent player in cancer-focused genetic testing services, has reported strong financial results in its third-quarter earnings call. The company's total revenues rose by 10% to $168 million, primarily driven by a 14% increase in clinical services revenue and a substantial 305% surge in adjusted EBITDA, which amounted to $13 million. This marks the fifth consecutive quarter of positive adjusted EBITDA for NeoGenomics, with Next Generation Sequencing (NGS) revenue growing by 26% and accounting for 31% of total clinical volume.

The company is also gearing up for the launch of several new tests and a digital platform, NEO Helix, aimed at enhancing customer experience. Among the planned launches are NEO PanTracer, a liquid biopsy test, and NEO AML Express, a rapid AML test, expected in early 2025.

Despite a 10% decline in ADX revenue in Q3 due to international site closures and restructuring, and increased operating expenses, the company remains optimistic about future growth. With $388 million in cash and marketable securities, NeoGenomics plans to retire $201 million in convertible notes due in May 2025. The company is also exploring strategic acquisitions to enhance market reach and capabilities, particularly in new NGS modalities.

InvestingPro Insights

Recent data from InvestingPro sheds additional light on Neogenomics' financial performance and market position. The company's market capitalization stands at $1.96 billion, reflecting its significant presence in the genomic testing sector. Despite the positive outlook from BTIG, it's worth noting that Neogenomics has not been profitable over the last twelve months, with a negative P/E ratio of -27.25.

However, aligning with BTIG's optimistic view, InvestingPro Tips suggest that net income is expected to grow this year, and analysts predict the company will be profitable this year. This expectation of profitability supports BTIG's confidence in Neogenomics' potential for profitable growth in the coming years.

The company's revenue growth remains strong, with a 12.06% increase over the last twelve months, reaching $644.12 million. This growth trend aligns with Neogenomics' confirmed revenue growth forecast for 2024 mentioned in the article.

For investors seeking more comprehensive analysis, InvestingPro offers additional tips and insights. Currently, there are 6 additional InvestingPro Tips available for Neogenomics, providing a deeper understanding of the company's financial health and market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2024 - Fusion Media Limited. All Rights Reserved.